Banks blamed for tighter regulations

Bankers who complain about excessive regulation have no one but themselves to blame for their rising regulatory burden, according to academic and industry analyst Michael Ong.

'The financial industry is being pressured into compliance that should have come naturally,' said Mr Ong, professor of the Stuart Graduate School of Business in Illinois, and author of The Basel Handbook.

Mr Ong, who was speaking at the Asian Banking Summit 2005 in Singapore yesterday, said he too was concerned by the increasingly complex rules-based approach to supervision arising from the new Basel II capital accord under which banks are to be supervised, and legislation in the United States, such as the Sarbannes-Oxley Act.

'I am concerned that we are now abiding by rules, rather than conscience,' he said.

However, Sarbannes-Oxley was enacted to protect shareholder interests in the wake of corporate accounting scandals in the US, and banks themselves had to bear part of the blame for those scandals, Mr Ong said.

As a result of the judicial processes underway in the US, those scandals were now finding their way back into the headlines, he said, referring to the guilty verdict this week for WorldCom's former chairman, Bernard Ebbers, on charges that he helped orchestrate massive accounting frauds at the giant telecommunications firm.